Trade

Britain would develop its own separate satellite navigation system if it lost access to the Galileo project, the European Union’s version of GPS, Britain’s finance minister said on Friday.

Britain told the European Union on Thursday it will demand the repayment of up to 1 billion pounds ($1.34 billion) if the bloc restricts its access to Galileo.

“The plan has always been to work as a core member of the Galileo project, contributing financially and technically to the project. If that proves impossible then Britain will have to go it alone, possibly with other partners outside Europe and the U.S., to build a third competing system,” Philip Hammond told reporters before a meeting of EU finance ministers in Brussels.

“For national security strategic reasons we need access to a system and we’ll ensure that we get it,” he added.

He said Britain was aware of the short time available for talks on its departure from the European Union and was working on “all sorts of options” to maintain the open border between Northern Ireland and Ireland after it leaves.

“We are very conscious of the ticking clock and the need to make significant progress for the June European Council”, Hammond said, adding that a comment from a senior EU official on “fantasy” Brexit gambits were not “particularly helpful

The Prime Minister’s former Chief of Staff, Nick Timothy, has today urged Minister’s to stand up to Parliament and insist that there will be no customs union agreement with the European Union.

Writing in TheSun, Mr Timothy says those who insist the UK should remain part of the customs union with the EU need to take a wider look at the implications this would bring.

Nick Timothy (R) has urged the Government to abandon any plans for a customs union or customs partnership.

Timothy highlights that of course remaining in the customs union is appealing, it requires little change and would allow tariff-free trade for firms and would minimise the checks that go on at borders for British citizens.

But he then goes on to say that there are little-discussed downsides to remaining in a customs union. The biggest disadvantage is that we would have to be rule-taker. That is we would have to abide by all the rules of the European Union without any say in how these rules are applied to Britain.

Even more importantly however though, is that should we elect to remain in the customs union, we would no control over what restrictions the EU may place on our trade throughout the Brexit negotiating process. He says there is a risk we may end up in a situation like Turkey, where we cannot form a trade deal with a country until the EU has established one. Such a reason he said, is why so few countries outside the EU choose to join a customs union with the EU:

“Other than Turkey, the only country outside the EU to form a customs union with it is Monaco: whose population would fill less than half of Wembley ­Stadium.”

Nick Timothy

This is why it is important to reject the idea of remaining within the customs union, we cannot be rule takers once we leave the European Union. This is why, Timothy argues, Ministers must stare down the ire of Parliament to ensure that this does not occur:

“It would be a bad deal for Britain, too. And as ministers have always said, “no deal is better than a bad deal.””

Nick Timothy

Mr Timothy says the Government must work out what it’s own preferred option for our future trade relationship is first and foremost. There are currently two options, both of which would guarantee zero tariffs and mutual recognition of standards for trade between Britain and Europe.

The first is a “highly streamlined customs arrangement”, which would involve some customs checks between Britain and the EU, but use technology and policy solutions to make trade as smooth as possible.

But the second is a new customs partnership, which Timothy argues, would see us as external border to the EU, where we would run dual customs checks for goods moving between here and the EU. It sounds great on paper, but ultimately seems unlikely to succeed:

The EU has dismissed it as impossible, and it involves significant risks for Britain.”

Nick Timothy

Mr Timothy pointed to the dangers of such an agreement, saying that we would lack the ability to alter our rules and regulations and may eventually deter businesses from exporting or may see them turn to the higher EU tariffs.

The Prime Minister must stare down the challenges from rebel MPs and Peers.

It would also not provide us with the freedom, he points out, to move beyond the shores of the European Union and seek out our own trading deals, which of course was a crucial point to Brexit in the first place.

Mr Timothy has therefore urged his former boss and her cabinet colleagues to utterly reject both the customs union and the customs partnership.

But he has also struck a warning to the rebel Tory MPs saying that a partial Brexit would almost certainly see the next election fought on a need to “finish the job”. He said it would see the future of the Conservative Party dominated by Britain’s relationship with the EU. He has warned them to be “careful what they wish for.”

He concludes by saying it may not be what the remainers want, but it is time to move on and ensure that we have a clean and neat break from the European Union.